What is the example of expenditure cycle?

What is the example of expenditure cycle?

Assume that your company periodically buys office supplies. Your expenditure cycle would be creating purchase orders from various employee requests for more paper, pencils and print cartridges, and calling the office supply store to place the order using the purchase order.

What is the basic purpose of the expenditure cycle?

The primary objective of the expenditure cycle is to minimize the total cost of acquiring and maintaining inventory, supplies, and services. The production cycle is a recurring set of business activities and related data processing operations associated with the manufacture of products.

What are the two phases of expenditure cycle?

This chapter examines the principal features of the two major subsystems that constitute the expenditure cycle: (1) the pur- chases processing subsystem and (2) the cash disbursements subsystem.

Is an expenditure cycle document?

request. The purpose of the purchase requisition is to request authorization to purchase goods/services and as such, to ensure that orders are properly authorized before orders are placed.

What is the first step in the expenditure cycle?

The first step in the expenditure cycle is to order materials, supplies and services for the company. Different individuals or departments in the company track their consumables and create a purchase requisition when they’re low on goods.

What is the expenditure process?

An expenditure process is the process of creating a requisition and/or purchase order for goods/services incurred by the district. After the purchase order is created by the district, it is sent to the vendor supplying the goods/services.

What are the three basic activities of the expenditure cycle?

The three basic activities performed in the expenditure cycle are: (1) ordering goods, supplies, and services; (2) receiving and storing these items; and (3) paying for these items. These activities mirror the activities in the revenue cycle.

What are the major subsystems of the expenditure cycle?

Expenditure Cycle subsystems: Purchasing/Accounts Payable, Cash disbursements, Payroll, and Fixed assets.

What is voucher expenditure cycle?

When a supplier’s invoice is received, the accounts payable department is responsible for matching it with a corresponding purchase order and receiving report. This combination of the suppliers invoice and associated supporting documentation creates what is called a voucher package.

What are the four activities in the expenditure cycles?

EXPENDITURE CYCLE INFORMATION NEEDS The AIS needs to provide information to evaluate the following: (1) purchasing efficiency and effectiveness; (2) supplier performance; (3) time taken to move goods from receiving to production; and (4) percent of purchase discounts taken.

What are the source documents in expenditure cycle?

The expenditure cycle employs the following accounting records: AP subsidiary ledger, voucher register, check register, and general ledger.

What are the 5 major transaction cycles?

The Transaction Cycle model is one way to view basic business processes. The purpose of The AIS Transaction Cycles Game is to provide drill and practice or review of the elements that comprise the five typical transaction cycles identified as: revenue, expenditure, production, human resources/payroll, and financing.